Recent increases in wages and benefits for civil servants have garnered applause from labour experts, surpassing the initially agreed upon 3% during negotiations in 2022.
Labour expert Herbert Jauch says the 5% increase for most civil servants is reasonably close to the inflation rate.
The government, along with the Namibia Public Workers Union (Napwu) and the Namibia National Teachers Union (Nantu) agreed on a flat N$600 per month increase for pay grades 15 and 14, while pay grades 13 to 1 will see a 5% boost in basic salary.
These changes are set to take effect on April, 2024.
“My impression of the wage deal is that the government did far more to accommodate the unions’ demands than during the last negotiations,” Jauch says.
The housing subsidy adjustments are ranging from N$3 837 to N$9 648 per month based on salary brackets, benefiting a broad spectrum of civil servants.
Moreover, there will be a 20% increase in housing and transport allowances for employees below management level, with an 8% raise in the motor vehicle allowance for managerial staff.
These subsidies and allowances will be backdated from 1 October 2023.
“The increase in housing subsidies is substantial and will ease the burden on civil servants with housing bonds,” Jauch says.
The recent raise for the 107 000 civil servants is projected to increase the public wage expenditure by N$1,7 billion in the upcoming 2024/25 fiscal year.
“On the other hand, the increasing wage bill would have to be accommodated in the national budget,” Jauch says.
Labour expert Sydwill Scholtz says while the recent public servant wage increases may not appear sufficient to some, their impact on individuals facing months of destitution after salaries are paid cannot be overlooked.
He said increasing benefits for land and housing suggests a shared goal between the government and unions to promote land and property acquisition.
“The only difficulty is that in all instances there is not necessarily serviced land available for the employees to purchase,” Scholtz says.
He says augmented housing benefits, combined with recent amendments allowing the purchase of a second property without a deposit, could invigorate the housing market.
Scholtz suggests directing the granted increases to areas such as education with the highest potential return on investment in human capital.
He says the concern goes beyond the mere increase, but extends to the overall level of remuneration when compared to the rest of the Southern African Development Community region.
“The members of society would be able to see the alleviation of the increased inflation and also see a slight increase. It is therefore prudent for members of the public to budget and plan their financial affairs within their means of income,” Scholtz says.
He suggests that the government explore setting minimum wage levels for specific pay grades, considering various factors within defined brackets.
Although acknowledging this as a longer-term prospect, he stresses the importance of initiating steps towards this goal.
Addressing issues within medical aid schemes is crucial, Scholtz says, adding that benchmarking and investigating various factors and benefit structures are essential to uplift the lowest income level employees to an acceptable standard of living.
The secretary general of the Trade Union Congress of Namibia, Mahongora Kavihuha, has also welcomed the increases.
“We appreciate that they agreed on a flat rate of N$600 for the lowest paid. That we are happy with. The only issue is that it only kicks in next year,” he says.
Kavihuha advocates transparency in the submission of proposals for salary raises for workers.
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